Facts and Background:
Plaintiffs’ 1900 square foot home in East San Diego County was completely destroyed in the 2003 Cedar Fires. Upon submitting their claim to a third party claims administrator under a homeowners insurance policy issued by Western, they learned that their policy limits were insufficient to rebuild their home.

Plaintiffs were compelled to retain legal counsel to protect their interests and Western immediately increased the existing policy limits by an amount well in excess of $100,000. At the time that plaintiffs retained counsel, Western had not fully paid all benefits under the policy.

Plaintiffs’ Contentions:
Plaintiff contended that Western breached the insurance contract and engaged in unreasonable claims handling conduct by failing to pay benefits due under the policy. Plaintiffs further contended that Western placed the claim on a low priority, ignored plaintiffs’ repeated phone calls and either never reviewed the claims file or reviewed it in so cursory a manner as to render the review meaningless.

Defendants’ Contentions:
Western contended that it paid more policy benefits than were ever due and owing under the original insurance contract by paying more than $615,000, and that any delays were the result of mistake, or inadvertence, rather than bad faith conduct.